Page 38 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

M. Revenue Classifications
Revenue is recognized when earned. The Authority will classify revenues
as operating or non-operating based on the following criteria:

Operating revenues are from the revenue sources that constitute the
principal ongoing activity of the operations of the Airport. The major
components of operating revenue consist of landing fees and terminal
building and ground rentals, concession and parking fees, and other
miscellaneous fees and charges. Landing fees and terminal building rates
are charged on the basis of recovery of actual costs for operating and
maintaining the Airport airfield and terminal areas.

Non-operating revenues are from revenue sources related to financing
activities and other activities which do not constitute the principal
ongoing activities of the Authority’s operations. These include PFCs,
interest income, and grant revenue related to specific programs.

N. Expense Classifications
The Authority will classify expenses as operating or non-operating based
on the following criteria:

Operating expenses relate to the principal ongoing activities of the
operations of the Airport. The major components of operating expenses
consist of personnel costs, contractual services, utilities, maintenance,
materials and supplies, professional services, depreciation and
amortization, and equipment rentals and repairs.

Non-operating expenses relate to financing activities and other activities
which do not constitute the principal ongoing activities of the
Authority’s operations. These include primarily interest expense.

O. Federal Grants
When a grant agreement is approved and all eligibility requirements have
been met, the expenditures are recorded as a federal grant receivable and as
a capital grant contribution.

P. Cash and Cash Equivalents
The Authority considers cash-on-hand, bank deposits and highly liquid
investments with an original maturity of three months or less to be cash and
cash equivalents.

Q. Receivables
Accounts Receivables are reported at their gross value when earned and are
reduced by the estimated portion that is expected to be uncollectible. The
allowance for uncollectible amounts is based on collection history, and
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